Elon Musk’s reputation as an audacious entrepreneur is well-earned, but his inclination for careless statements is now exacting a real toll. Ill-conceived tweets about taking electric-car maker Tesla private triggered the wrath of the Securities and Exchange Commission, which is suing Musk for fraud and seeking the billionaire’s ouster from leadership roles at Tesla.

Shares of the company plunged 13.9% in Nasdaq trading on Friday, down $42.75 to $264.77. That decline sent Musk’s net worth down more than $1.1 billion, based on a Forbes assessment. (For now, he’s worth an estimated $19.7 billion.)

The SEC filed suit against Musk, without also naming Tesla, on Thursday in federal district court in New York, claiming his August 7 comments on Twitter about having “funding secured” to take Tesla private at $420 a share, constituted securities fraud because that statement was untrue and he knew it or should have. The agency began investigating the tweets last month. Shortly thereafter, Tesla’s board announced that after a brief exploration of Musk's privatization plan, it would remain public.

Elon Musk via Twitter

“At the time he made these statements Musk had not secured funding for the proposed transaction. To the contrary we allege that he had not even discussed key deal terms including price with any potential source of funding,” Stephanie Avakian, co-director of the SEC’s Division of Enforcement, said in a press conference webcast.

The complaint “seeks a finding that Musk committed securities fraud, an injunction prohibiting him from doing so in the future, civil penalties, disgorgement of any ill-gotten gains, and a bar prohibiting Musk from serving as an officer or director of a public company in the future,” she said.

Musk said the agency’s move left him “deeply saddened and disappointed.”

“I have always taken action in the best interests of truth, transparency and investors,” he said in an emailed statement. “Integrity is the most important value in my life and the facts will show I never compromised this in any way.”

In response to the SEC's move, CFRA equity analyst Garrett Nelson cut his rating of Tesla shares to sell from hold and lowered his price target to just $225.

"While Tesla isn't named as a defendant, we view the complaint as a potential serious blow to the company, as the SEC is seeking to bar Musk (also TSLA’s largest shareholder at 19.8%) from serving as an officer or director of any U.S. public company," Nelson said in a research note. "Despite Musk's recent erratic behavior, we think most investors want him to remain with the company and they value shares at what we view as extremely lofty multiples given the potential for Musk's vision to drive future growth."

The securities litigation comes on the heels of libel lawsuits brought this month against Musk by a British man who’d aided in the rescue of youths trapped in a Thai cave, whom the Tesla chief accused of being a pedophile. He provided no evidence to support that claim.

Were Musk to be removed as both CEO and chairman of Tesla, it’s unclear who might succeed him, even in an interim capacity, given the large number of executive departures that have occurred at the company since 2016.

“Enron while it was collapsing did not have turnover as high as this company does,” Jeffrey Sonnenfeld of the Yale School of Management told Forbes, in a recent interview. “If you go back 18 months, it’s 50 significant people that have left.”

In interviews with the New York Times in August, Musk discussed his habit of working up to 120 hours a week to help Tesla boost production of its critical Model 3 electric car, its highest-volume vehicle to date. He also mentioned taking Ambien in an attempt to get some sleep, despite the drug’s negative side effects. Shortly after those interviews, he created an additional uproar over his decision to smoke marijuana and drink whiskey during a podcast interview with a comedian.

The SEC may have had the latter incident in mind, based on a reference in its lawsuit regarding the $420 share price Musk mentioned in his tweets.

“He calculated the $420 price per share based on a 20% premium over that day’s closing share price because he thought 20% was a ‘standard premium’ in going-private transactions,” the suit said. “This calculation resulted in a price of $419, and Musk stated that he rounded the price up to $420 because he had recently learned about the number’s significance in marijuana culture and thought his girlfriend ‘would find it funny, which admittedly is not a great reason to pick a price.’”

For its part, Tesla's board said it remains "fully confident in Elon, his integrity and his leadership of the company, which has resulted in the most successful US auto company in over a century."

"Our focus remains on the continued ramp of Model 3 production and delivering for our customers, shareholders and employees,” the board said in an emailed statement.

The timing of the suit also comes as Tesla rushes to conclude its third quarter, which ends on September 30. In the company’s second-half results call, Musk promised that Tesla would be profitable in the third and fourth quarters as Model 3 sales grew.

At the moment, Tesla’s ability to finally become sustainably profitable will take a backseat to whether the man who led it from startup obscurity to a global powerhouse in electric vehicles will be around to see that happen.

"A new CEO would have to deal with manufacturing issues, liquidity concerns, and a marginally profitable flagship product," UBS analyst Colin Langan said in a research note. Tesla's need for capital to keep funding its expansion is also a complicating factor, he said.

"Historically, Tesla has had easy access to capital markets, largely due to the public’s perception of Musk as a visionary. Without Musk, investors may no longer be willing to continue funding a company that has never reported an annual profit."